United Party for National Development (UPND) leader Hakainde Hichilema has called for drastic reforms at the Development Bank of Zambia (DBZ) and the Citizens Economic Empowerment Commission (CEEC), and the pension funds that have money sitting idle.
Taunting a report that showed that Zambia and Nigeria are the two leading African countries in terms of entrepreneurial appetite, Mr. Hichilema said that many entrepreneurs lack in Zambia lack a package for their businesses to grow and offered a practical advise on how the PF Government can implement the ideas he is suggesting.
Below is his full post
It does not come as a surprise that Zambia and Nigeria are the two leading African countries in terms of entrepreneurial appetite.
We know that Zambians are very enterprising. What many entrepreneurs lack, is a package for their businesses to grow. It is a known fact that over 50% of formal employment in the world is created by SMEs. These are major contributors to GDP and taxes that run most economies. In Zambia over 88% of all formal jobs are in SMEs, they also contribute 70% to GDP. Making this a huge sector and engine of the economy.
Our plan for this sector is very simple. Firstly, the major problem with SMEs is access to financing. This is the reason if the current Government is serious about unlocking the sector, they should reform DBZ and CEEC into venture capital institutions (I will explain this further below). Secondly, the Government must not just sign MOUs with foreign Governments like the much talked about Israel and India MOUs, but should actually sign contracts for the supply of goods and services. This is called market linkage which an SME cannot do on its own. The third dimension is what we call contract discrimination, here is an example, a road contract has various components, technical and material supplies. We have been told that 20% contract value of any project must be given to the local contractors. I disagree and suggest an alternative; what if we exclude certain elements like the supply of cement, the supply of stones, the supply of steel for instance during road construction to be exclusive for Zambians, that would have more impact than an arbitrary figure.
Let me talk about financing again. I am suggesting to PF to carry out drastic reforms at DBZ and CEEC and the pension funds that have money sitting idle sometimes. DBZ and CEEC must take the form of venture capitalists, where they finance Zambian start-ups and SMEs and they own shares in those companies and appoint management to those companies. This way they will ensure that they are part of the day-to-day decision-making process. While ZDA can be transformed into a proper Business Development Service outfit that could be the institution that looks for business opportunities for start-ups and SMEs to give them the necessary boost.
Lets talk fellow countrymen, these are ideas anyone can pick, irrespective of who is in Government.